2.0.0.10 false Note 18 - Domestic and International Acquisitions 00917 - Disclosure - Note 18 - Domestic and International Acquisitions true false false false 1 usd $ false false Dollars Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 2 Notes to Financial Statements [Abstract] 0 pbra_NotesToFinancialStatementsAbstract pbra false na duration string No definition available. false false false false false true false false false false false false 1 false false false false 0 0 false false false No definition available. false 3 Note 18 - Domestic and International Acquisitions 1 pbra_DomesticAndInternationalAcquisitionsTextBlock pbra false na duration string No definition available. false false false false false false false false false false false false 1 false false false false 0 0 <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> 18. Domestic and International Acquisitions a) Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. In accordance with Codification Topic 350 -Goodwill and Other Intangible Assets (ASC 350), the Corporations goodwill is not amortized, but is tested for impairment at a reporting unit level, which is an operating segment or one level below an operating segment. The Company conducts its annual goodwill impairment review in the fourth quarter of each year and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. Goodwill impairment encompasses a two step approach. In the first step the Company compares the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value is lower than the carrying amount including goodwill, there is an indication of impairment loss that is measured by performing the second step. In the second step, the estimated fair value from the first step is used as the purchase price in a hypothetical acquisition of the reporting unit. Purchase business combination accounting rules are followed to determine a hypothetical purchase price allocation to the reporting units assets and liabilities. The residual amount of goodwill that results from this hypothetical purchase price allocation is compared to the recorded amount of goodwill for the reporting unit, and the recorded amount is written down to the hypothetical amount, if lower. During the fourth quarter of 2008, the Company recorded a goodwill impairment of US$223 in Petrobras indirect subsidiary in United States, Pasadena Refining System, that encompasses a refinery and a trading company. The primarily factors for the goodwill impairment were: (a) a decline in the price of crude oil and oil products (b) a gross margin decrease of refined products in the wholesale market, and (c) a decrease in the demand for refined products. Change in the balance of goodwill for the years ended December 31, 2009 and 2008: <div align="left"> <table style="WIDTH: 100%; FONT-FAMILY: '''''''''''''Times New Roman'''''''''''''; FONT-SIZE: 9pt" border="0" cellspacing="0"> <tr> <td></td> <td width="2%"></td> <td width="15%"></td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Balance as of December 31, 2007 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">313</td> </tr> <tr> <td align="left"></td> <td></td> <td align="right"></td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Goodwill from PIB BV </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">50</td> </tr> <tr valign="bottom"> <td align="left">Goodwill impairment of Pasadena Refining System </td> <td> </td> <td align="right">(223)</td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Cumulative translation adjustment </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">(22)</td> </tr> <tr> <td align="left"></td> <td></td> <td align="right"></td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Balance as of December 31, 2008 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">118</td> </tr> <tr> <td align="left"></td> <td></td> <td align="right"></td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Cumulative translation adjustment </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff" align="right">21</td> </tr> <tr> <td align="left"></td> <td></td> <td align="right"></td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">Balance as of December 31, 2009 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff" align="right">139</td> </tr> </table> </div>   </div> <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> b) Acquisition of distribution interests in Chile On April 30, 2009, Petrobras, through its wholly owned subsidiaries Petrobras Venezuela Investments & Services B.V. e Petrobras Participaciones, S.L., located in the Netherlands and Spain, respectively, concluded the process for the acquisition of the distribution and logistics businesses of ExxonMobil in Chile, with the payment of US$400, net of the cash and cash equivalents of the purchased companies. Due to immateriality, proforma information has not been presented. On December 1, 2009 Petrobras acquired Chevron Chile S.A.C, which produces and sells lubricants of the Texaco brand in Chile, for approximately US$14. c) Sale option of the Pasadena refinery by Astra In a decision handed down on April 10, 2009, in the existing arbitration process between Petrobras America Inc - PAI and others and Astra Oil Trading NV - ASTRA and others, which was in progress in accordance with the arbitration rules of the International Centre for Dispute Resolution, the exercise of the put option exercised by ASTRA was confirmed as valid with respect to PAI and subsidiaries of the remaining 49.13% of the shares of ASTRA in Pasadena Refinery Systems Inc. ("PRSI"), and in the correlated trading company. PRSI owns the Pasadena Refinery, with an operating office in Texas. The operating, management and financial responsibilities have already been transferred to PAI, since September 17, 2008, based on preliminary decision of October 24, 2008. According to the decision on April 10, 2009, the amount to be paid by PAI for the remaining shareholding interest in the refinery and in the trading company in Pasadena was fixed at US$466. The payment would be made in three installments, the first in the amount of US$296 (originally due on April 27, 2009, according to the decision) and the following two payments in the amount US$85 each, with due dates fixed by the arbitrators for September 2009 and September 2010. The disputing parties presented requests for clarification to the arbitration panel on certain points of the decision, but on June 3, 2009 the arbitration panel had already confirmed in totum the original decision without presenting any further explanations. The arbitration decision also determined, in addition to the amount attributed to the purchase of that shares, reimbursement to ASTRA by PAI of the amount of US$156, consisting of a guarantee related to the loan taken out by the Trading Company from BNP Paribas, since the line of credit for this Company from the aforementioned bank had been closed. </div> <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> The amounts corresponding to the purchase of the shares and the reimbursement of the payment of the guarantee to ASTRA by BNP have been recognized in the accounting by the Company since the arbitration decision in April 2009. At December 31, 2009, these amounts corresponded to US$488 and US$177, respectively, already considering the interest due up to this date. In March 2009 a loss was recognized in the amount of US$147, corresponding to the difference between the fair value of the net assets and the value defined by the arbitration panel. In April 2009, the Company recorded a charge of US$289 as Additional Paid in Capital due to the acquisition of the remaining 49.13% of the shares of ASTRA in Pasadena Refinery Systems Inc. ("PRSI"), which relates to the difference between the fair value of the shares acquired and the noncontrolling interest carrying amount at the closing date. Until now the parties have not reached an agreement with respect to the finalization of various pending items existing between them, some of them the object of double collection on the part of ASTRA, for signing the overall term of agreement that will put an end to the litigation and permit the payments that are the object of the arbitration decision. On March 10, 2010, the Federal Court of Houston, Texas, USA confirmed the arbitration award handed down on April 10, 2009, rejecting a request by PAI for extinguishment of the process without resolution of merit, through incompetence of the judge, and of partial annulment and modification of the arbitration ward. It ratified, notwithstanding, the decision that PAI acquired 100% of the shareholding of Astra Oil Trading NV in PRSI. PAI is going to appeal the part of the decision that confirmed the competence of the Federal Court in question and other aspects of the decision. Judicial proceedings in which requests are made for reciprocal indemnifications made by the parties also continue in progress. Additionally, PRSI and the Trading Company are seeking recovery of certain accounting and fiscal books and records of these companies incorrectly withheld by ASTRA and two legal firms. </div> <div style="PADDING-LEFT: 0%; PADDING-RIGHT: 0%"> d) Purchase options for specific purpose companies In 2009 Petrobras exercised its purchase option for the SPEs listed below, as forecast in the option agreement for the purchase of shares executed between Petrobras and the former shareholders of the SPEs. <div align="left"> <table style="WIDTH: 100%; FONT-FAMILY: '''''''''''Times New Roman'''''''''''; FONT-SIZE: 8pt" border="0" cellspacing="0"> <tr> <td width="15%"></td> <td width="1%"></td> <td width="13%"></td> <td width="1%"></td> <td></td> <td width="1%"></td> <td width="10%"></td> <td width="1%"></td> <td width="13%"></td> <td width="1%"></td> <td width="13%"></td> </tr> <tr valign="bottom"> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Date of the option </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Project </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Corporate name of the SPE </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">% of shares </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Value of the option </td> <td> </td> <td style="BORDER-BOTTOM: #000000 1px solid" align="center">Additional Paid in Capital </td> </tr> <tr> <td colspan="11"> </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">April 30, 2009 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left">Marlim </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left">Marlim Participações S.A. </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">100% </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">US$0.402 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">- </td> </tr> <tr valign="bottom"> <td align="left">December 11, 2009 </td> <td> </td> <td align="left">CLEP </td> <td> </td> <td align="left">Companhia Locadora de Equipamentos Petrolíferos </td> <td> </td> <td align="right">100% </td> <td> </td> <td align="right">US$52 </td> <td> </td> <td align="right">US$983 </td> </tr> <tr valign="bottom"> <td style="BACKGROUND-COLOR: #cceeff" align="left">December 30, 2009 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left">NovaMarlim </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="left">NovaMarlim Participações S.A. </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">43.43% </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">US$0.345 </td> <td style="BACKGROUND-COLOR: #cceeff"> </td> <td style="BACKGROUND-COLOR: #cceeff" align="right">US$13 </td> </tr> </table> </div>   The consummation of the transfer of the remaining shares of NovaMarlim Participações S.A., 56.57% of the capital, depends on the conclusion of the formal procedures with the bookkeeping agency As the Companys previous variable interest in these VIEs were being accounted for in accordance with ASC Topic 810-10-25 (Variable Interest Entities), the 2009 share acquisition had no material impact on Petrobras consolidated accounting records. </div> 18. Domestic and International Acquisitions a) Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net false false false No definition available. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true